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Gloomy Picture for Banks in Europe's Core

European bank stocks had a dearth of good news this year, and analysts warn that 2012 could be even worse for lenders in the common currency's inner core of France and Germany.

Uncertainty about the ongoing debt crisis and its myriad spillover effects—including a likely euro-zone recession, higher funding costs and further write-downs on sovereign-debt holdings—remain the biggest risks for French and German bank shares.